Beware, Everybody Is In the Pool Now

Investors of all sizes and shapes are nearly all in the pool now.

Investor sentiment (in most surveys) is tilted very bullish, mutual fund investors hold near-record-low cash reserves, hedge funds are at multiyear highs in terms of net long exposure, and retail investors (though not at the extremes of 1999-2000) have plowed money into domestic equity funds en masse since the beginning of the year.